MORTGAGE AGREEMENT

(State of Tennessee)

[// GUIDANCE: This template is drafted for a traditional “mortgage” lien. Tennessee customarily employs deeds of trust; however, this form is fully enforceable as a mortgage under Tenn. Code Ann. Title 66 and Title 35. Consider substituting a deed of trust if a private trustee sale is preferred.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Grant of Mortgage & Secured Obligations
IV. Representations and Warranties
V. Affirmative and Negative Covenants
VI. Defaults and Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution & Acknowledgment

I. DOCUMENT HEADER

This MORTGAGE (this “Mortgage”) is made and entered into effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [BORROWER LEGAL NAME], a [STATE OF FORMATION & ENTITY TYPE], whose address is [BORROWER ADDRESS] (“Borrower”); and
2. [LENDER LEGAL NAME], a [STATE OF FORMATION & ENTITY TYPE], whose address is [LENDER ADDRESS] (“Lender”).

A. Recitals

A. Borrower has executed that certain Promissory Note dated as of the Effective Date in the principal amount of [PRINCIPAL AMOUNT] (the “Note”).
B. Borrower desires to secure performance of the Obligations (as defined below) by granting to Lender a first priority mortgage lien on the Property (as defined below).
C. Lender is willing to extend or continue credit to Borrower subject to the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants herein and other valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

II. DEFINITIONS

For purposes of this Mortgage, the following terms shall have the meanings set forth below (any term not defined herein that is defined in the UCC or applicable Tennessee statutes shall have the meaning thereunder):

“Debt” – collectively, (i) the unpaid principal of, and all interest on, the Note; (ii) all late charges, default interest, advances, fees, and expenses owing under the Loan Documents; and (iii) any renewals, extensions, modifications, or replacements thereof.

“Default Rate” – the interest rate specified in the Note to apply after the occurrence and during the continuance of an Event of Default.

“Improvements” – all existing and future buildings, structures, fixtures, and related facilities situated on the Land.

“Loan Documents” – the Note, this Mortgage, any guaranties, assignments, environmental indemnities, and all other instruments evidencing or securing the Debt.

“Obligations” – all covenants, duties, debts, and liabilities of Borrower under the Loan Documents, whether now existing or hereafter incurred.

“Permitted Encumbrances” – items of title shown on Schedule 1 attached hereto and such other liens as Lender may expressly approve in writing.

“Property” – collectively, the Land, the Improvements, and the Rents, all as more particularly described in Section III.

“Rents” – all present and future rents, issues, profits, income, and proceeds generated from the Property.

III. GRANT OF MORTGAGE & SECURED OBLIGATIONS

3.1 Grant

For the purposes and upon the terms herein set forth, Borrower hereby GRANTS, BARGAINS, SELLS, CONVEYS, ALIENS, ENFEEFS, AND MORTGAGES unto Lender, with power of sale as permitted by Tenn. Code Ann. §§ 35-5-101 et seq., all of Borrower’s right, title, and interest in and to:

a. The real property described in Exhibit A attached hereto (the “Land”);
b. All Improvements now or hereafter located on the Land;
c. All Rents;
d. All easements, rights-of-way, water rights, mineral rights, and appurtenances;
e. All proceeds, insurance, and condemnation awards relating to the foregoing.

TO HAVE AND TO HOLD the Property unto Lender and Lender’s successors and assigns, IN TRUST and as security for the timely payment and performance of the Obligations.

[// GUIDANCE: Insert full legal description in Exhibit A. Confirm recordability format and margin requirements of the county register of deeds.]

3.2 Secured Obligations

This Mortgage secures: (i) payment of the Debt; (ii) performance of all Obligations; and (iii) all future advances (whether or not obligatory) under Tenn. Code Ann. § 66-14-102.

IV. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender as of the Effective Date and continuing until the Obligations are indefeasibly paid in full:

1. Organization & Power. Borrower is duly organized, validly existing, and in good standing under the laws of its formation jurisdiction and is qualified to transact business in Tennessee.
2. Authority & Enforceability. Execution, delivery, and performance of the Loan Documents have been duly authorized and constitute legal, valid, and binding obligations of Borrower, enforceable in accordance with their terms.
3. Title. Borrower holds indefeasible fee simple title to the Land, free of all liens except Permitted Encumbrances.
4. Compliance. The Property and Borrower’s use thereof comply in all material respects with applicable laws, including zoning, building codes, environmental statutes, and the Americans with Disabilities Act.
5. No Litigation. Except as disclosed on Schedule 2, no action or proceeding is pending or, to Borrower’s knowledge, threatened that could materially adversely affect the Property or Borrower’s ability to perform.
6. Taxes. All ad valorem taxes and assessments on the Property are paid to the current year.
7. Financial Statements. All financial information delivered to Lender is, to Borrower’s knowledge, true, correct, and complete in all material respects.

All representations and warranties shall survive the closing and shall not be affected by any investigation by Lender.

V. AFFIRMATIVE AND NEGATIVE COVENANTS

Borrower covenants and agrees that, until the Obligations are paid in full:

5.1 Payment and Performance

Borrower will timely pay the Debt and perform all Obligations.

5.2 Taxes and Assessments

Borrower shall pay, prior to delinquency, all taxes, assessments, and governmental charges against the Property.

5.3 Insurance

a. Maintain all-risk property insurance on the Improvements in an amount not less than full replacement cost;
b. Maintain liability insurance with minimum limits of [INSURANCE LIMITS];
c. Provide Lender with certificates naming Lender as mortgagee (or loss payee) and additional insured, as applicable.

5.4 Maintenance; Waste

Keep the Property in good repair, free of waste, and comply with all laws and covenants affecting the Property. Borrower shall not commit or permit waste or remove or materially alter Improvements without Lender’s prior written consent.

5.5 Environmental Matters

Comply with all Environmental Laws; promptly remediate any contamination; and indemnify Lender from environmental liabilities.

5.6 Negative Covenants

Borrower shall not, without Lender’s prior written consent:
a. Create or permit any lien on the Property other than Permitted Encumbrances;
b. Transfer, sell, lease for a term exceeding [LEASE TERM CAP], or otherwise encumber any portion of the Property;
c. Alter the collateral structure (including mergers or consolidations) that could adversely affect Lender.

5.7 Books, Records, and Inspection

Keep proper books and permit Lender to inspect the Property and relevant records upon reasonable notice.

VI. DEFAULTS AND REMEDIES

6.1 Events of Default

Each of the following shall constitute an “Event of Default”:

1. Non-Payment. Failure to pay any installment of principal, interest, or other sum when due;
2. Covenant Breach. Failure to perform any covenant, condition, or agreement herein or in any Loan Document within [30] days after notice;
3. Misrepresentation. Any representation proves materially false when made;
4. Insolvency. Borrower becomes insolvent, admits inability to pay debts, or becomes subject to bankruptcy or receivership;
5. Cross-Default. A default under any Loan Document not cured within applicable cure periods.

6.2 Remedies

Upon an Event of Default and at any time thereafter, Lender may, at its option:

a. Declare all Debt immediately due and payable;
b. Commence non-judicial foreclosure by advertisement and sale in accordance with Tenn. Code Ann. §§ 35-5-101 et seq., or pursue judicial foreclosure;
c. Enter and take possession of the Property;
d. Collect Rents and apply them to the Debt;
e. Seek appointment of a receiver under Tenn. R. Civ. P. 66;
f. Exercise all other rights and remedies available at law or in equity, including set-off.

[// GUIDANCE: At least 20 days’ published notice of sale and 30 days’ written notice to Borrower are required under Tenn. Code Ann. § 35-5-101. Insert specific notice mechanics in Schedule 3 if desired.]

6.3 Right of Redemption

Borrower [select one:]
☐ hereby WAIVES all statutory rights of redemption pursuant to Tenn. Code Ann. §§ 66-8-101 et seq.
☐ retains statutory rights of redemption, which permit redemption within one (1) year after foreclosure by paying the bid price, interest, and costs.

6.4 Deficiency Judgment

After foreclosure, Lender may seek a deficiency judgment for the difference between (i) the Debt and (ii) the greater of the foreclosure sale price or the fair market value of the Property as of the sale date, consistent with Tenn. Code Ann. § 35-5-118.

6.5 Attorney Fees and Costs

Borrower shall pay all reasonable attorneys’ fees and costs incurred by Lender in enforcing the Loan Documents, whether or not litigation is commenced and including any appeals.

VII. RISK ALLOCATION

7.1 Indemnification by Borrower

Borrower shall indemnify, defend, and hold harmless Lender and its officers, directors, employees, and agents (each, an “Indemnified Party”) from and against any and all claims, losses, liabilities, damages, and expenses (including reasonable attorneys’ fees) arising out of (i) the Loan Documents, (ii) the Property, or (iii) any breach by Borrower, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party.

7.2 Limitation of Liability

Notwithstanding anything to the contrary, Lender’s liability to Borrower under the Loan Documents shall not exceed the aggregate amount of the secured Debt outstanding at the time of the event giving rise to such liability.

7.3 Insurance Proceeds Application

Unless otherwise required by applicable law, Lender may apply insurance or condemnation proceeds to restoration of the Property or to reduction of the Debt, in Lender’s sole discretion.

7.4 Force Majeure

Performance (other than payment obligations) shall be excused during periods of Force Majeure, defined as events beyond the reasonable control of the affected party, including acts of God, war, terrorism, governmental orders, or natural disasters, but expressly excluding economic hardship or shortage of funds.

VIII. DISPUTE RESOLUTION

8.1 Governing Law

This Mortgage and the Loan Documents shall be governed by and construed in accordance with the laws of the State of Tennessee, without regard to conflict-of-laws principles.

8.2 Forum Selection

Borrower irrevocably submits to the exclusive jurisdiction of the state courts sitting in [COUNTY], Tennessee and agrees that venue is proper in such courts.

8.3 Arbitration Excluded

The parties agree that no dispute arising under the Loan Documents shall be subject to arbitration.

8.4 Jury Trial Waiver

[OPTIONAL] Borrower and Lender hereby knowingly, voluntarily, and irrevocably waive any right to a trial by jury in any action or proceeding arising out of the Loan Documents.

[// GUIDANCE: Tennessee enforces contractual jury waivers if clear and conspicuous. Include boldface or ALL CAPS for enforceability.]

8.5 Preservation of Foreclosure Remedy

Nothing in this Article shall limit Lender’s right to foreclose, seek specific performance, or obtain other provisional or equitable relief with respect to the Property.

IX. GENERAL PROVISIONS

1. Amendments and Waivers. No amendment or waiver shall be effective unless in a writing signed by the party against whom enforcement is sought.
2. Assignments. Lender may assign the Loan Documents without consent; Borrower may not assign any rights without Lender’s prior written consent.
3. Successors and Assigns. The Loan Documents shall bind and benefit the parties and their respective successors and assigns.
4. Severability. If any provision is held invalid, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to effectuate the intent thereof.
5. Integration. The Loan Documents constitute the entire agreement of the parties with respect to the subject matter and supersede all prior understandings.
6. Captions. Headings are for convenience only and shall not affect interpretation.
7. Counterparts; Electronic Signatures. This Mortgage may be executed in counterparts (including electronic or PDF signatures), each of which is deemed an original and all of which constitute one instrument.
8. Notices. All notices shall be in writing and delivered (i) in person, (ii) by certified mail, return-receipt requested, or (iii) by nationally recognized overnight courier to the addresses set forth above (or such other address as may be designated). Notice is effective upon receipt or refusal.

X. EXECUTION & ACKNOWLEDGMENT

IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.

BORROWER:

[BORROWER LEGAL NAME]
By: ______
Name: ____
Title: _____

LENDER:

[LENDER LEGAL NAME]
By: ______
Name: ____
Title: _____

NOTARY ACKNOWLEDGMENT – Tennessee

State of Tennessee )
County of [__] )

On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [NAME], [TITLE] of [ENTITY], to me known (or satisfactorily proven) to be the person whose name is subscribed to the foregoing instrument, and acknowledged that he/she executed the same for the purposes therein contained on behalf of said entity.

Witness my hand and official seal.

Notary Public
My Commission Expires: _______

EXHIBIT A

Legal Description of Land

(Attach metes and bounds or lot/block description sufficient for recording.)

SCHEDULE 1

Permitted Encumbrances

SCHEDULE 2

Pending Litigation (if any)

SCHEDULE 3

Foreclosure Sale Notice Procedures

[// GUIDANCE: Insert detailed timeline and publication requirements here if loan program mandates.]

[// GUIDANCE: Record this Mortgage in the county where the Land is located. Ensure payment of appropriate recording tax per Tenn. Code Ann. § 67-4-409. Attach any required affidavits of exemption or consideration statements.]